Adeno-associated virus (AAV) DNA integrates preferentially into a specific locus on human chromosome 19 by non-homologous recombination. The interactions of the non-structural viral protein, Rep, with chromosome 19-derived DNA and AAV internal terminal repeats (ITR) suggests involvement of the viral protein in targeted integration. We propose that targeted integration results from limited DNA replication initiated by binding of Rep to a consensus binding sequencing present in both the integration locus and the viral ITR. We postulate that a dynamic mechanism involving both limited DNA synthesis of the cellular sequences and protein- protein interactions between subunits of Rep protein and a cellular DNA polymerase complex generates the viral-cellular recombination junctions. The generalized and extended Rep functions we have determined are consistent with this model. Analysis of genomic DNA of latently infected cell lines are supportive as well in that duplications and rearrangements of cellular sequences are present. Furthermore, every AAV provirus characterized to date was present asymmetrically distributed with respect to the Rep-binding element.